TOKYO — The yen was restrained while the risk-sensitive Australian dollar held firm on Wednesday on the back of a solid commodity market and a positive risk mood from upbeat US economic data and upbeat corporate earnings.
The Japanese currency was also hampered by expectations that the Bank of Japan (BOJ) will signal a strong commitment to maintaining its easy monetary settings this week even as many other central banks around the world look to tighten their policy to stem inflation.
The dollar held firm at 114.20 having put on 0.37 percent in the previous session, staying near its four-year high of 114.695 touched a week ago.
“After the pandemic, the dollar became the ultimate safe-haven currency but recently the yen’s beta (sensitivity) to stock prices is becoming stronger than the dollar’s,” said Shinichiro Kadota, senior FX strategist at Barclays.
Wall Street shares closed at a record high on Tuesday thanks to solid corporate earnings.
US economic data published on Tuesday was also upbeat, with consumer confidence rising unexpectedly and new home sales surging more than expected.
The BOJ is widely expected to downgrade its economic assessment at its policy announcement on Thursday, with markets betting on no rate hike in the foreseeable future.
The European Central Bank, which holds its own policy meeting on Thursday, is also expected to be slow in tightening its policy, keeping the euro in check.
The euro stood at $1.1594, having eased 0.4 percent so far this week. — Reuters
